The National Power Corp. (NPC) has
filed an application for recovery cost adjustments worth P1.078 billion.

The amount represents additional
operating costs incurred by NPC-SPUG (Small Power Utilities Group) as a result
of the fluctuation of fuel prices used in power generation.

Off-grid or missionary areas
locations not connected to the grid are served by NPC’s SPUG. The state firm is
allowed to recover this deferred fuel costs through the Generation Rate
Adjustment Mechanism (Gram).

In its eight-page filing with the
Energy Regulatory Commission (ERC) last month, the state firm proposed to
recover this amount spread over two years by imposing the Gram directly to
consumers in NPC-SPUG areas.

If approved, the proposed rates will
be implemented over two years to fully recover P1,078,243,310 worth of deferred
fuel costs to mitigate the impact on NPC customers in the missionary areas.

In particular, NPC asked to collect
P1.0982 per kilowatt -hour (kWh) in Luzon, P1.0541 per kWh in the Visayas, and
P0.7657 per kWh in Mindanao.

NPC said the proposed 15th GRAM,
covering the period of January to July December 2015 is “fair and reasonable,”
as it was computed in line with the Gram rules and consistent with the
principles of free and competitive electricity market as provided under RA
9136.

“The proposed 15th Gram application
was approved for filing by the NPC Board on February 8, 2017,” the NPC said.

Further, the NPC said it has fully
complied with the Gram’s monthly reportorial requirements in support of the
calculated allowable costs covering the billing period.

NPC President Ma. Gladys Cruz-Sta.
Rita had said it normally takes at least one year before any petition may be
acted upon because any petition has to undergo several public hearing before
being endorsed.

“NPC normally files its rate
adjustment every year to recover the adjustments in fuel costs and dollar
exchange but it is not automatically or immediately approved. And with ERC’s
intervention, there is hardly an increase in the rates granted to NPC. It is
usually spread out over several years,” she said.